Accounting Issues Analysis
Stephen is the Chief Financial Officer of a newly listed company, UJam Ltd, which operates a chain of retail outlets in Jamaica and Antigua & Barbuda.
The company has grown very rapidly, having been founded only three years ago.
The Board of directors has been made aware by the JSE that UJam Ltds corporate governance is perceived as weak.
This has also been mentioned by various regulators which take an interest in UJam Ltds operations.
In addition, articles have appeared in the press suggesting that the company has been engaged in poor treatment of employees and in price-fixing in collusion with its main competitors.
Stephen wishes to help improve the companys corporate governance and legal compliance but is unclear about a number of issues.
Question 1
Identify UJam Ltds stakeholders and the nature of the interest they may have in the company.
Question 2
Explain to Stephen what is meant by good corporate governance, including the problems it is intended to address.
Answer:
Question 3
Explain to Stephen one issue that arises out of the accusations regarding employee rights and price-fixing.
Question 4
Recommend for Stephen an appropriate structure for UJams board and its committees, and the importance for the board of the company to have diversity.
